2023: So far, so good… but it could get even better!

Good morning!

The US 10-year is down -0.043% to 3.576% as I type—which, of course, means traders are keen to lever up and stay on the gas.

At least so far this morning anyway.

Here’s my playbook.

Apple to use its own displays by 2023-'24

Team Cupertino plans to use its own displays in mobile devices as early as late ‘23/’24. Reports suggest that Apple will start with watches, then move quickly into other devices. This takes the OLED display from standard to standout as microLEDs come on the scene. (Read)

Trade Idea: A pairs trade might work out nicely.

Logic is simple. Apple is just starting to gather strength in displays, so this is a monster plus for my favourite fruity computer maker. And a resounding negative for LG, Sharp, and Samsung. Sony might still be a player, but I’m not certain the company can get outta its own way at the moment.

Apple will crest $200 a share before most people realize what’s happening. I know that’s hard to imagine, given that AAPL is just barely above 52-week lows, but that’s exactly why I am calling your attention to the situation.

Volatility = profit potential

The sooner you learn to embrace volatility, the sooner your portfolio will thank you.

Here’s why you should pay attention. Volatility isn’t just prices going up and down like people think. The real magic—and the point I want you to understand—is that volatility creates temporary price dislocation, a $5 way of saying “bargains.”

If that doesn’t make sense, think about it this way. Name 5 companies that you’ll kick yourself in 5 years if you don’t buy now. This isn’t a trick question… imagine yourself standing around the BBQ with friends. Either you’re gonna be bursting with pride because you snapped up shares during the rout, or you’re gonna be shrugging your shoulders sheepishly because you missed the opportunity.

Like shooting ducks in a barrel. 2022 was the most volatile on record, according to a new report from Charles Schwab. The S&P 500 moved up or down more than 120 days last year, which is second only to 2008 when the count was 130 days during the depths of the Global Financial Crisis.

The S&P 500 is now up +2.6% YTD.

OBAers: I highlighted two new recommendations this past Monday, and I hope you’re paying attention! Both could play out nicely, especially if the markets follow along with the playbook I outlined in my 2023 Outlook. Upgrade to paid

This growth market will increase by 187.5% in under 5 years

What’s happening: Hackers disrupted Denmark’s central banks along with seven other private banks earlier this week. The attackers used DDoS—which stands for distributed denials of service—to direct traffic to targeted servers and knock ‘em off line. (Read)

Why you should care. Cybercrime is expected to surge from around $8 trillion today to north of $23 trillion by 2027. To put that in context, that’s 22.1% of the world’s GDP last year and a 187.5% increase in the next 5 years.

A no-brainer. If you’re not investing in companies that help prevent cybercrime, you really need to ask yourself why. It may just be the single most important investing theme in modern history. Not all companies are equal, though. Upgrade to paid

FTX: The plot thickens as more big names emerge

As I suspected would be the case when the scandal first broke, there are some big names coming out in the wash. It wasn’t just Tom Brady and Gisele Bündchen. Fox Business is reporting that venture backers also include Robert Kraft, who owns the New England Patriots, and Paul Tudor Jones, a billionaire hedge fund manager. Other notables are Dan Loeb of Third Point and even rival exchange Coinbase. (Read)

What’s interesting to me about the latest data is that you can see how the big names stayed in the game though multiple rounds of funding which—it seems to me—makes it harder to claim that they didn’t know anything or were continuing to do due diligence as has been publicly claimed.

This will be a sh!tstorm of epic proportions if bankruptcy attorneys and federal prosecutors can determine that they “knew” but continued to pump… errr... promote FTX anyway.

The faithful are undeterred.

Tread lightly if you’re among ‘em. Macro Hive did a quick analysis suggesting that a Nasdaq 2000-style crash in Bitcoin would result in Bitcoin falling to $8,254 and that Ethereum would reach just $143 if the Nasdaq dropped to 3,500. My own analysis matches up, but I’m more concerned about the macro story associated with rising rates, regulation, and new court disclosures.

Hungary: Getting busy in the boudoir could let you live you tax free for life

Fixing taxes isn’t just about income like most people think. The real driver is having a constantly increasing tax base and labour pool. Some countries like the US are attempting to address this via immigration, but Hungary has taken the opposite approach and wants to encourage people to get busy in the boudoir. (Read)

As of January, mothers under the age of 30 will be exempt from paying personal income tax for the rest of their lives.

No word on all the soiled nappies that’ll be created, but I smell an opportunity. 🤦‍♂️

Diaper makers may benefit from new sales.

At the other end of things… longtime readers will recall that I shared a story with you back in 2007 about the Liebenau Foundation, which built a powerplant run exclusively on soiled diapers to heat the retirement homes the foundation operates. (Read)

I believe it’s still running just fine if my rusty German is correct, but it’s hard to tell because diapers and incontinence pads aren’t explicitly mentioned any longer in the foundation’s materials.

Crisis speeds up innovation, quite literally and figuratively, too!

Bottom Line

Many people want to be wealthy but very few are willing to put in the effort needed.

MAKE it happen!

As always, let’s get out there and MAKE it a great day!

Keith 😊